Set forth below is the text of a comment that I put to the discussion thread for a blog entry here titled It Breaks My Heart When People Don’t Comment on My Investing Posts:
you are the one who isn’t educated. It’s like you read a book about the Ocean and think you are the messiah because you learned that water is wet.
We’re not all that far apart re this one, What.
I never went to Investing School and I never managed a big fund. We agree on that much.
All that I have ever said about stock investing follows from the painfully obvious observation that valuations matter. We agree on that much.
I never could have done what I’ve done without help from hundreds of good and smart and hard-working people with names like John Walter Russell and John Bogle and Robert Shiller and Wade Pfau and Michael Kitces and Bill Bernstein and Scott Burns and Rob Arnott and Peter Bernstein and Andrew Smithers and Sam Parler and Jeremy Grantham and John C Craig and Microlepsis and BenSolar and Wanderer and Cliff Asness and Ed Easterling and on and on. We agree on that much.
There is indeed a sense in which I am saying that water is wet. I don’t have a problem with you putting it that way.
Where we go on different tracks is when you suggest that having someone say “water is wet” out loud and in clear and firm and uncompromising terms isn’t a super big deal in InvestoWorld in the Year 2012.
We have achieved a consensus that the Old School SWR studies get the numbers wildly wrong. That’s good. That makes me happy. That is the “water is wet” statement that I was making in 2002, when people were throwing rocks at me for even suggesting the possibility that water is wet.
It’s not enough in the Year 2012. The “water is wet” statement in 2012 is that, since we all know that the Old School SWR studies get the numbers that people use to plan their retirements wildly wrong, we need to correct those goshdarned Old School SWR studies before they cause more human misery.
I’m still saying things that no one else is saying, What. I’m still ahead of the curve. I like to think that I am no longer 10 years ahead of the curve, perhaps we’ve got it down to five years or three years or one year at this point. But so long as I am saying things that very much need to be said that none of the others are saying, I am ahead of the curve, no?
Do you hear Bogle demanding that the Old School SWR studies all be corrected by the close of business today? Do you hear Shiller saying that? Do you hear Bengen saying that? Heaven help us all, do you hear Lindauer or Greaney saying that?
Why are these other people not saying that water is wet?
I’m not at the top because I am so smart, What. I am at the top because all the hot shots are so dumb.
The better way to put it is that I am at the top because all the hot shots are to various degrees suffering from cognitive dissonance.
Do you know what the cure is? It is to open the internet to honest posting on all kinds of important investment-related topics. Do you know what the magic is in that? It is that, once these people are able to openly give voice to their doubts about Buy-and-Hold, they are going to hear thousands of their friends and neighbors and co-workers and fellow community members giving voice to their doubts too. And that is going to convince them that we need to all get to work building a new model, one that works, one that doesn’t cause such human misery.
I am not smarter in an I.Q. sense than any of these other people, What. But I sure as shootin’ am saying smarter things. That’s because I gave up on Buy-and-Hold a long, long time ago. I gave up on Buy-and-Hold on the night of August 27, 2002. That’s the night that Greaney threatened to kill my wife and children if I continued posting honestly on SWRs and hundreds of Buy-and-Holders who were in the room at the time and heard what he said sat on their hands and did nothing.
That ain’t normal behavior among the humans, What. So we know that there is something at the root of this Buy-and-Hold business that is very, very, very very sick and twisted.
I’ve picked up a clue as to what it might be. I think it might be the Get Rich Quick element, the part that is supported by precisely zero research and zero data but that serves as marketing wildfire when the time comes to make a buck from this stuff. It’s that Get Rich Quick garbage that tells us that there is no need to lower our stock allocations when stock prices go to insanely dangerous levels that is killing us, What. It’s that Get Rich Quick element of the Buy-and-Hold package that is making Bogle and Bernstein and Burns and, heaven help us all, Lindauer and Greaney and all the other Goonssound so goshdarned moronic when they talk about stock investing.
The Buy-and-Holders achieved a breakthrough when they came up with the idea of rooting their strategies in research and data. That was pow, pow, powerful stuff.
They gave it all back and then some when they let the Marketing Department Con Men persuade them to stretch the truth just a wee bit and change the finding from “Short-Term Timing Doesn’t Work” (supported by the research) to “No Form of Timing Is Required” (pure Get Rich Quick marketing garbage).
If it hurts their precious wittle feelings when I point out that the things they say about investing sound as dumb as sin, that ain’t on me, What. That’s on them. I am the one telling them to give up the Get Rich Quick garbage. I am the one saying to go back to the cool idea of letting the academic research be our guide. I am the one saying to correct the Old School studies. I am the one saying to open every investing board and blog on the internet to honest posting on hundreds of important investment-related topics. I am the one saying to launch a national debate on what really works in stock investing. I am the one saying that we all should be working together to bring the economic crisis to an end as soon as humanly possible.
Are most of those people going to rush past me once they work up the courage to acknowledge in clear and firm and bold and uncompromising words that The Buy-and-Hold Emperor Is Wearing No Clothes? Probably.
You know what? I’m cool with that. It doesn’t bother me.
I want to see the economic crisis brought to an end. I want to do something to help the thousands of my fellow community members who are in the process of suffering failed retirements because of the Campaign of Terror that has been waged against our board communities for ten years now. I’m not worried about who gets the credit for all the amazing insights we have developed together over the past 10 years. There are so many great insights that my view is that there is credit enough to go around. It’s not a problem.
The only problem is that, so long as you continue defending this fantasy that there is some alternate universe where a pure Get Rich Quick approach can work, you don’t get credit for anything because you say stuff that makes you sound like a freakin’ moron. And, so long as you aren’t getting credit for any insights, you hate all the fine community members doing constructive, positive, life-affiirming, honest work.
We are not seeking to keep all the goodies to ourselves, What. You are on the outside looking in only because you are too darn proud to walk through the door, plop your butt down in a chair and get to work mining the good stuff.
I cannot plop your butt for you, What. That’s an inside job.
You dig, man?